While the economy has generally endangered President Barack Obama’s re-election chances, one measure may give him an advantage.At least one economist believes the misery index favours a second Obama term.
The misery index combines the unemployment rate with inflation, and it has historically been a good indicator of presidential elections, accurately predicting nine of the last 12.
When the misery index goes up, it is a sign of a weaker economy and tend to hurt the incumbent party. When the index falls, it benefits the incumbent.
“Our conclusion is that if voters choose their candidate based on this metric alone, the election will narrowly tilt in favour of the current President,” Deutsche Bank economist Carl Riccadonna recently wrote regarding the misery index.
This index was first used by Jimmy Carter against Gerald Ford in 1976. Ronald Reagan made it his basis for asking, “Are you better off now than you were four years ago?”
“When he was a candidate in 1976, President Carter invented a thing he called the misery index,” Reagan said in a debate a week before the election in 1980. “He said that no man with that size misery index has a right to seek reelection to the presidency. Today, by his own decision, the misery index is in excess of 20%, and I think this must suggest something.”
Reagan went on to beat Jimmy Carter in that election when the misery index surpassed 20 per cent, the highest it has reached since the index has been calculated. Prior to that, Carter beat incumbent Gerald Ford in 1976 when the misery index surpassed 12.5 per cent.
This measure failed to predict the 2004 election, as George W. Bush won despite a slight increase in the misery index over his first term.
Currently, the misery index is at 9.8 per cent, down from 11.3 per cent from four years ago.
“While the national misery index appears to hold sway over political outcomes, a victory in the Electoral College will largely depend on a narrow swath of ‘swing states’,” Riccadonna notes.
In the key battle ground states of Nevada, Colorado, and Pennsylvania, the misery index has actually increased, meaning they are worse off today than they were four years ago. Florida is only marginally better off.
“If these states go for Romney, his electoral tally will come in at a still-too-low 255,” Riccadonna writes. 270 votes are needed to win.
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